Sterling Struggles To Gain In the Market Due To Brexit Worries
By Daisy Joseph
The British Pound failed to overpower the dollar on Thursday as the investors are not happy with Britain’s plan to exit the European Union. Pound recovered briefly on Wednesday against the dollar, but the gains were not sustained. The economic resilience showed by the United Kingdom’s economic data didn’t help the currency to fare better in the market.
Even though the services PMI showed a growth in the economy, the investors are aware of the danger lurking in the form of Brexit. Until now, neither Theresa May nor EU officials have softened and this means that hard negotiations are to be expected. Hard Brexit is determined to be a major hit to the British economy which shows resilience until now.
Sterling traded at $1.2477 and it gained 0.15 against the Euro. Since June when Brexit vote was finalized, Sterling has lost one-fifth of its value against the dollar. Trump’s rally which pushed the dollar up didn’t help the situation either. When the European Union softens to provide better deals on financial services for Britain, Sterling could jump up again in the market.
The initial talks on Brexit are expected to commence in the middle of May. Initial talks will be firm as both the sides are confident of the economy right now. Michel Barnier, the chief negotiator of EU has urged Britain to focus on withdrawal terms now instead of pushing parallel talks on free trade deal after Brexit with the bloc.
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